“If you look at other industries, where economies of scale exist, you see more consolidation. Ten years ago, in our business, the top ten insurers covered about 27 percent of the membership, nationally. Today, the top ten companies cover about 50 percent. In ten years it has consolidated that much, and I think that it will continue in the future,” Glasscock tells Health Affairs founding editor John Iglehart.

WellPoint was formed when Anthem Inc. merged with WellPoint Health Networks Inc. in November 2004. The company is, by membership, “the largest health benefits company in the country, with 34.2 million members, about 50 percent of whom we fully insure,” Glasscock says. WellPoint serves the bulk of its members through the Blue Cross or Blue Cross and Blue Shield companies it operates in fourteen states, and it also serves members across the country through its non-Blue company, UniCare.

While Glasscock says he expects further consolidation in the health insurance industry, the former banking executive also suggests that insurers could face new competition from financial services companies. Traditionally, these companies have focused on the brokerage aspect of health insurance -- finding coverage for their individual and small-group clients -- and have stayed away from actually underwriting coverage.

However, Glasscock observes, “We are seeing some convergence of financial services and health care, driven in part by this whole notion of consumer-directed health plans, health savings accounts [HSAs], and financial resources that will be dedicated to that.” In response to a question from Iglehart, Glasscock says that he would not be surprised if a major financial services company “made a serious effort to become a formidable force within health insurance.”

According to Glasscock, the question is “to what extent will insurers allow themselves to be disintermediated by the financial services enterprises?” He notes that the Blue Cross and Blue Shield system has formed a bank, called the “Blue Bank,” in which WellPoint is an investor.

Calculated Risk Takers, Part-Time Daredevils, And Thrill Seekers. Glasscock describes WellPoint’s recently introduced “Tonik” product line, initially rolled out in California, which features high-deductible policies “designed specifically to get at what we call the ‘young invincibles’ -- the nineteen-to-twenty-five-year-olds, many of whom don’t have coverage because they often think it’s unnecessary and expensive.”

Tonik premiums vary but can be as low as $69 a month, according to Glasscock. He explains: “Tonik is actually three products, using names that these young invincibles can relate to. The highest level of coverage is in the Calculated Risk Taker (with a $1,500 deductible), followed by the Part-Time Daredevil ($3,000) and the Thrill Seeker ($5,000). Outside of the deductible, the product designs are essentially the same: They cover office visits, ER care, prescription drugs, hospital services, dental, and vision.”

Glasscock tells Iglehart, “With the introduction of this new product, combined with our other product offerings, last year we sold policies to 378,000 people who had previously been uninsured.”

Consumer-Driven Health Care. Glasscock himself is enrolled in a high-deductible, “consumer-driven” health plan, coupled with a tax-favored health reimbursement account. This is an option that WellPoint offers its employees through its subsidiary Lumenos, acquired in June 2005. Glasscock tells Iglehart that he can not yet provide data on the relative health status of company employees who enrolled in this consumer-driven plan, since WellPoint only began offering the Lumenos option last year.

Glasscock predicts that in the future, the United States “will see a health care system that is much more driven by the consumer.” But he cautions that the right information must be available to consumers: “For example, it’s imperative that quality information accompany disclosure of information about cost. Without it, many consumers may be inclined to believe that higher cost is associated with higher quality.”

WellPoint’s Public Health Vision. Glasscock says that, by 2010, WellPoint wants its “Member Health Index” to be 25 percent better than it is today. The index includes twenty measures in four areas. For example, in the area of screening and prevention, the company measures how often its members get indicated screenings for various types of cancer, high cholesterol, and other risk factors and conditions. In the area of care management, WellPoint tracks compliance with treatment regimes for chronic conditions such as hypertension and diabetes.

According to Glasscock, WellPoint’s ambitions are not limited to improving the health of its own members. “Based on public health measures reported by the Centers for Disease Control and Prevention and by states, we have calculated an index for the health status of a given state,” the WellPoint CEO tells Iglehart. “Many of the states in which we have a leading market share are relatively unhealthy by that measure. One of our goals is to improve the health status of these populations -- not just among our members, but across the entire state. Another measure the WellPoint board has established is how successful we are in reducing uninsurance in all of the states where we operate.”

Health Affairs, published by Project HOPE, is the leading journal of health policy. The peer-reviewed journal appears bimonthly in print with additional online-only papers published weekly as Health Affairs Web Exclusives at www.healthaffairs.org.